Gold glitters for mining students

The prospect of a fast-tracked career and a hefty starting salary has students flocking to mining schools. After low 1990s metals prices helped turn away engineering and science graduates, mining companies struggle to attract skilled labour

When Travis Howard started his degree at the Colorado School of Mines four years ago he decided to pursue a double major in mechanical engineering and metallurgy to give himself the best chance of landing a high-paying job when he graduated.

Turns out he had nothing to worry about. The 21-year-old, who dropped his mechanical classes to focus on mining after his second year, has accepted a job with Kinross Gold Corp at a starting salary of US$64,000 a year plus bonuses.

With graduation still a month away, “pretty much everyone is sitting on an offer or two,” said Howard of his classmates, adding that some students were juggling four or five offers.

In fact, students at the Colorado School of Mines are some of the most employable in the country – 94% of 2011 graduates from the mining engineering, metallurgy and materials, geological engineering, and geophysics programs have jobs.

The average starting offer across the four departments was US$65,868 a year, well above the US$42,569 median that the National Association of Colleges and Employers expects first-time job seekers with college degrees to command in 2012.

The sky-high starting wages for fresh graduates highlights the difficulties faced by mining and exploration companies to find and retain skilled labour. In fact, mining CEOs often cite the labor crunch as their No. 1 cost pressure.

The problem is rooted in the low metals prices of the 1990s, when gold was worth US$350 an ounce, and mining was the last choice for engineering and science students.

“When the mining industry was not in vogue, the colleges didn’t get the numbers coming in,” said Nick Eastwood, president of MinSouth and a consultant at Hunter Personnel. “So they shut their courses and got rid of the people who taught it.”

Fast-forward two decades, gold is worth more than US$1,650 an ounce and there is a yawning shortage of mid-career professionals. The problem will get worse over the next decade, as the current crop of senior engineers, geologists and mining executives retires.

“When they go, the replacements just aren’t there,” said Eastwood, adding that most people working in the industry now are either aged 50 or more, or have less than five years experience. “There’s a leadership problem looming.”

The risk is that companies will end up simply not having enough skilled people to staff their project pipelines, and that could mean some will never come to fruition.

If new mines are shelved, it would put more pressure on the world’s current metal resources, and that could send commodity prices, already near record levels on demand from rapid urbanization in China and India, even higher.

For resource-rich countries such as Canada, Australia and Chile, along with developing nations such as Mexico and Ghana, fewer mines equates to lower royalties, fewer jobs and tax shortfalls, denting public coffers.[np-related]

OPPORTUNITY KNOCKS

The prospect of a fast-tracked career and a hefty starting salary has students flocking to mining schools. The Colorado School of Mines, which also offers a range of non-mining science and engineering degrees, gets more than 11,000 applications each year and accepts less than 1,000 students.

In Canada, admissions to the top mining schools have nearly tripled in three years, helped by salaries that can be even higher for graduates who move abroad. Recruiters say six-figure starting rates are increasingly common in Australia, where mid-career engineers make more than $200,000 a year.

Indeed, the job market there is so hot that Australia has loosened its immigration policy to allow more highly skilled mine workers in on short-term visas, a type of reform that Canada is also considering.

“Ten years ago we were lucky to have one or two students applying,” said Ferri Hassani, a professor of mining engineering at McGill University in Montreal. “In some years it was that bad. But this year alone 250 people have applied to mining.”

But the rising supply of students brings its own problems, as bigger classes means more competition for the limited number of summer jobs in the field.

“We’re all looking for those four-month roles,” said Omar Aboulezz, a third-year mining engineering student at Queen’s University in Kingston, Ontario. “There’s a lot of students here who still don’t have summer jobs.”

Students who have industry experience ahead of graduation, even just a four-month internship, get more offers and command a higher starting salary than their peers, experts say. They also have a head start on completing their professional designation.

For their part, companies that offer summer internships can secure a loyal workforce years ahead of competitors who only look to hire graduates.

Most companies that came to Queen’s University this year looking to recruit new graduates from the Robert M. Buchan Department of Mining left empty handed, said Courtney Squires, a fourth-year mining engineering student.

“A lot of people in my class are returning to places they worked in the summer,” said Squires, who has taken a job at Agnico-Eagle Mines Ltd’s Meadowbank mine in the northern Canadian territory of Nunavut, where she interned in 2010.

“I think that if companies invested more in (students) and created more student jobs, they’d probably see less difficulty in finding new graduates,” said Squires. “We have room to be picky about where we choose to work.”

MINING THE FUTURE

It’s a message that industry is starting to get. Kinross, now offers summer internships and runs training and mentorship programs to help new graduates move from entry-level to future leaders as quickly as possible.

“Companies need to be innovative in the way in which they are bringing entry-level talent into an organization,” said Amy Grace, VP of global talent acquisition for Kinross. “The entry-level university talent is the talent of the future.”

But not all talent is created equal. While Kinross has more engineering jobs than it can fill, the Toronto-based mining company does not hire many junior geologists, a field that has become popular with young people looking to capitalize on the mining boom. Admission requirements for geology and earth sciences are less stringent than for engineering programs.

That has left a crop of new geology graduates struggling to find permanent work, said Russ Pysklywec, chairman of the geology department at the University of Toronto, noting both lofty expectations and the fact that most entry-level mining geologist jobs are short-term contracts.

“Maybe our students are kind of unrealistic – they do expect very high salaries coming out,” said Pysklywec. “I think pushing US$90,000 to US$100,000 – to them US$60,000 would be not enough.”

That’s certainly higher than the reality for Caroline Klein, an exploration geologist who got her job with San Gold Corp nearly two years ago and started at US$65,000 a year.

Klein, who now makes US$75,000 a year plus bonus, fields regular calls from headhunters, but the 25-year-old is sticking with her current job – at least for now.

“Ideally I would like to live where I work so I am home every night,” said Klein, who works a two-week rotation at a remote camp in eastern Manitoba. “But I’m really happy I went with geology.”